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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.    )

Filed by the Registrant  x

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

Bank of America Corporation

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

PAYMENT OF FILING FEE (Check the appropriate box):

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March 19, 2008

Dear Stockholder:

I am pleased to invite you to the Bank of America Corporation 2008 Annual Meeting of Stockholders. The meeting will be held at 10:00 a.m., local time, on April 23, 2008, in the Belk Theater of the North Carolina Blumenthal Performing Arts Center, 130 North Tryon Street, Charlotte, North Carolina. If you are unable to attend, you will be able to listen to the meeting and view our slide presentation over the Internet at http://investor.bankofamerica.com.

Enclosed are a notice of matters to be voted on at the meeting, our proxy statement, a proxy card and our 2007 Annual Report.

Whether or not you plan to attend, please grant a proxy to vote your shares in one of three ways: via Internet, telephone or mail. Instructions regarding Internet and telephone voting are included on the proxy card (or, if applicable, in your electronic delivery notice). If you choose to grant a proxy by mail, please mark, sign and date the proxy card and return it in the enclosed postage-paid envelope. You may revoke your proxy at any time before it is exercised as explained in the proxy statement.

If you plan to attend, please bring the admission ticket attached to your proxy card and photo identification. Also, if your shares are held in the name of a broker or other nominee, please bring with you a proxy or letter from the broker or nominee confirming your ownership as of the record date.

Sincerely yours,

Kenneth D. Lewis

Chairman, Chief Executive Officer and President

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BANK OF AMERICA CORPORATION

Bank of America Corporate Center

Charlotte, North Carolina 28255

NOTICE OF 2008 ANNUAL MEETING OF STOCKHOLDERS

Important Notice Regarding the Availability of Proxy Materials for the

Stockholder Meeting to be Held on April 23, 2008

The Proxy Statement and Annual Report to Stockholders

are available at http://investor.bankofamerica.com

Webcast of the Annual Meeting: You may listen to a live audiocast of the meeting on our website at http://investor.bankofamerica.com at 10:00 a.m., local time, on April 23, 2008.

Items of Business:

Record Date: You can vote if you were a stockholder of record on February 27, 2008. In accordance with Delaware law, for 10 days prior to the Annual Meeting, a list of those registered stockholders entitled to vote at the Annual Meeting will be available for inspection in the office of the Corporate Secretary, Bank of America Corporation, Bank of America Plaza, Charlotte, North Carolina. The list also will be available at the Annual Meeting.

Proxy Voting: Your vote is important. Please submit your proxy as soon as possible via either the Internet, telephone or mail.

By order of the Board of Directors:

Alice A. Herald

Deputy General Counsel

and Corporate Secretary

March 19, 2008

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BANK OF AMERICA CORPORATION

Bank of America Corporate Center

Charlotte, North Carolina 28255

PROXY STATEMENT

We are providing these proxy materials in connection with the solicitation of proxies by the Board of Directors of Bank of America Corporation for the 2008 Annual Meeting of Stockholders (the “Annual Meeting”). In this proxy statement, we refer to the Board of Directors as the “Board” and to Bank of America Corporation as “we”, “us”, “our company”, “Bank of America” or the “Corporation.” This proxy statement is being mailed starting on or about March 19, 2008.

GENERAL INFORMATION

Record Date. Only holders of record at the close of business on February 27, 2008 will be entitled to vote at the Annual Meeting. Holders of the Corporation’s Common Stock (the “Common Stock”) and 7% Cumulative Redeemable Preferred Stock, Series B (the “Series B Stock”), vote together without regard to class except as otherwise required by law.

As of the record date of February 27, 2008, there were 4,455,756,945 shares of Common Stock, and 7,667 shares of Series B Stock entitled to vote at the Annual Meeting. Each share of Common Stock and Series B Stock is entitled to one vote.

Voting By Proxy. Whether or not you plan to attend the Annual Meeting, you may grant a proxy to vote your shares via Internet, telephone or mail as more fully described below:

If you properly submit a proxy without giving specific voting instructions, your shares will be voted in accordance with the Board’s recommendations as follows:

“FOR”:

and “AGAINST” the stockholder proposals regarding:

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If other matters properly come before the Annual Meeting, the persons appointed to vote the proxies will vote on such matters in accordance with their best judgment. Such persons also have discretionary authority to vote to adjourn the Annual Meeting, including for the purpose of soliciting proxies to vote in accordance with the Board’s recommendations on any of the above items.

Revoking Your Proxy. You may revoke your proxy at any time before it is exercised by:

Cost of Proxy Solicitation. We will pay the cost of soliciting proxies. In addition to soliciting proxies by mail or electronic delivery, we also may use some of our associates, who will not be specially compensated, to solicit proxies, either personally or by telephone, facsimile or written or electronic mail. In addition, we have agreed to pay Georgeson Inc. $17,000 plus expenses to assist us in soliciting proxies from banks, brokers and nominees. We also will reimburse banks, brokers and other nominees for their expenses in sending proxy materials to their customers who are beneficial owners.

Votes Required to Hold the Annual Meeting. In order to hold the Annual Meeting, a quorum consisting of the holders of a majority of the aggregate voting power of the Common Stock and the Series B Stock must be present in person or represented by proxy at the Annual Meeting. For purposes of determining the presence or absence of a quorum, we intend to count as present shares present in person but not voting and shares for which we have received proxies but for which holders thereof have abstained. Furthermore, shares represented by proxies returned by a broker holding the shares in nominee or “street” name will be counted as present for purposes of determining whether a quorum is present, even if the shares are not entitled to be voted on matters where discretionary voting by the broker is not allowed (“broker non-votes”).

Majority Vote Standard for Election of Directors. In October 2006, the Board amended our Bylaws to provide that a nominee for director in an uncontested election shall be elected to the Board if the votes cast for such nominee’s election exceed the votes cast against his or her election. Abstentions from voting, as well as broker non-votes, if any, are not treated as votes cast and, therefore, will have no effect on the proposal to elect directors. In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), the standard for election of directors will be a plurality of the votes cast at the meeting.

If a nominee who is currently serving as a director is not elected at the Annual Meeting, under Delaware law the director will continue to serve on the Board as a “holdover director.” However, under our Corporate Governance Guidelines, any director who fails to be elected must offer to resign from the Board. The director whose resignation is under consideration will abstain from participating in any decision regarding that resignation. The Corporate Governance Committee and the Board may consider any factors they deem relevant in deciding whether to accept a director’s resignation. The Board will publicly disclose its decision regarding the resignation within 90 days after results of the election are certified. If the resignation is not accepted, the director will continue to serve until the next annual meeting and until the director’s successor is elected and qualified. If a nominee who is not already serving as a director is not elected at the Annual Meeting, under Delaware law that nominee will not become a director and will not serve on the Board as a “holdover director.”

The Board will nominate for re-election only candidates who have tendered irrevocable resignations that will be effective upon: (i) the failure to receive the required vote at the next annual meeting at which they are nominated for re-election; and (ii) Board acceptance of such resignation. In addition, the Board will fill director vacancies and new directorships only with candidates who agree to tender, promptly following their appointment to the Board, the same form of irrevocable resignation.

Votes Required to Adopt Other Proposals. Approval of each of the other proposals requires the votes cast in favor of each such proposal to exceed the votes cast against such proposal. Abstentions from voting, as well as broker non-votes, if any, are not treated as votes cast and, therefore, will have no effect on any such proposal.

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Voting by Associates. If you participate in The Bank of America 401(k) Plan or The Bank of America 401(k) Plan for Legacy Fleet and MBNA and your account has investments in shares of Common Stock, you must provide voting instructions to the plan trustees (either via the proxy card or by Internet or telephone) in order for your shares to be voted as you instruct. If no voting instructions are received, your shares will not be voted. Your voting instructions will be held in strict confidence.

Householding. Unless we have received contrary instructions, we send a single copy of the annual report, proxy statement and notice of annual or special meeting to any household at which two or more stockholders reside if we believe the stockholders are members of the same family. Each stockholder in the household will continue to receive a separate proxy card. This process, known as “householding,” reduces the volume of duplicate information received at your household and helps reduce our expenses.

If you would like to receive your own set of our annual disclosure documents this year or in future years, follow the instructions described below.

If your shares are registered in your own name, please contact our transfer agent and inform them of your request to revoke householding by calling them at 1.800.642.9855 or writing to them at Computershare Trust Company, N.A., P.O. Box 43078, Providence, Rhode Island 02940-3078. Within 30 days of your revocation, we will send individual documents.

If two or more stockholders residing in the same household individually receive copies of the annual report, proxy statement and notice of annual or special meeting and as a household wish to receive only one copy, you may contact our transfer agent at the address and telephone number listed in the preceding paragraph and request that householding commence as soon as practicable.

If a bank, broker or other nominee holds your shares, please contact your bank, broker or other nominee directly.

Electronic Delivery. In addition to householding, we can also reduce our expenses if you elect to receive your annual reports and proxy materials via the Internet. If you request, you can receive email notifications when these documents are available electronically on the Internet. If you have an account maintained in your name at Computershare Investor Services, you may sign up for this service at www.computershare.com/bac.

Questions. If you hold your shares directly, please call Computershare Trust Company at 1.800.642.9855. If your shares are held in street name, please contact the telephone number provided on your voting instruction form or contact your broker directly.

CORPORATE GOVERNANCE

Commitment to Corporate Governance Best Practices

Bank of America’s business and affairs are managed by or under the direction of the Board. In its oversight of Bank of America, the Board sets the tone for the highest ethical standards and performance of our management, associates and the Corporation as a whole. The Board strongly believes that good corporate governance practices lead to successful business performance. Our corporate governance practices are designed to align the interests of the Board and management with those of our stockholders and to promote honesty and integrity throughout Bank of America. Over the past several years, we have enhanced our corporate governance practices in many important ways, and we continually seek out best practices to promote a high level of performance from the Board and management. The Board has adopted Corporate Governance Guidelines that embody long-standing practices of Bank of America as well as current corporate governance best practices. Highlights of our corporate governance practices are described below.

Corporate Governance Principles, Committee Charters and Code of Ethics

More information about corporate governance may be found on our website at http://investor.bankofamerica.com under the heading Corporate Governance. Information available at this website includes: (i) our Certificate of Incorporation; (ii) our Bylaws; (iii) our Corporate Governance Guidelines; (iv) our Code of Ethics; (v) the charters of each of the committees of the Board; and (vi) our Director Independence Categorical Standards. This information is also available in print free of charge upon written request addressed to: Bank of America Corporation, Attention: Shareholder Relations, 101 South Tryon Street, NC1-002-29-01, Charlotte, North Carolina 28255.

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The Board of Directors

The basic responsibility of the Board is to oversee the businesses and affairs of Bank of America. Key responsibilities of the Board and its committees include:

Board Evaluation and Education

Each year, the Board and each of its committees evaluate their effectiveness. The Board views self-evaluation as an ongoing process designed to achieve high levels of Board and committee performance.

All new directors participate in our orientation program in their first year as a director. This orientation includes presentations by senior management to familiarize new directors with our strategic plans, significant financial, accounting and risk management issues, compliance programs, conflict policies, Code of Ethics and other policies. The Board also encourages directors to participate in continuing education programs and reimburses directors for the expenses of such participation.

Director Independence

The Board is composed at all times of at least a majority of directors who are independent. As described below, the Board has determined that 14 of the Board’s 16 director nominees, or approximately 88%, are independent directors. The Board has adopted categorical standards to assist it in making the annual affirmative determination of each director’s independence status. These Director Independence Categorical Standards (“Categorical Standards”) are attached as Appendix A and posted on our website. A director will be considered “independent” if he or she meets the requirements of the Categorical Standards and the criteria for independence set forth from time to time in the listing standards of the New York Stock Exchange (“NYSE”).

The Board has evaluated the relationships between each current director (and his or her immediate family members and related interests) and Bank of America and its subsidiaries. The Board has affirmatively determined, upon the recommendation of the Corporate Governance Committee, that each of the following directors is independent under the Categorical Standards and the NYSE listing standards: William Barnet, III, Frank P. Bramble, Sr., John T. Collins, Gary L. Countryman, Tommy R. Franks, Monica C. Lozano, Walter E. Massey, Thomas J. May, Patricia E. Mitchell, Thomas M. Ryan, O. Temple Sloan, Jr., Meredith R. Spangler, Robert L. Tillman and Jackie M. Ward.

The Board has determined that Charles K. Gifford and Kenneth D. Lewis do not meet the independence standards. Mr. Lewis is our Chief Executive Officer. Mr. Gifford was employed by Bank of America or a predecessor and receives compensation from the Corporation which exceeds the threshold set forth in the Categorical Standards.

The Board also has evaluated the relationships between Bank of America and its subsidiaries and Paul Fulton and W. Steven Jones (and their immediate family members and related interests). Mr. Fulton retired in 2007. Mr. Jones is not standing for re-election to the Board in 2008. In early 2007 for Mr. Fulton, and in early 2008 for Mr. Jones, the Board affirmatively determined, upon the recommendation of the Corporate Governance Committee, that Mr. Fulton and Mr. Jones were independent under the Categorical Standards and the NYSE listing standards.

In making its independence determinations, the Board considered that in the ordinary course of business the Corporation and its subsidiaries may provide commercial and investment banking, financial advisory and other services to some of the independent directors and to business organizations and individuals associated with them. The Board also considered that in the ordinary course of business some business organizations with which an independent director is associated may provide products and services to the Corporation and its subsidiaries. The Board has determined that, based on the information available to the Board, none of these relationships was material.

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Board Attendance and Annual Meeting Policy

Directors are expected to attend our annual meeting of stockholders, board meetings and meetings of the committees on which they serve. They are also expected to prepare for meetings in advance and to dedicate the time at each meeting as necessary to properly discharge their responsibilities. Informational materials, useful in preparing for meetings, are distributed in advance of each meeting. In 2007, there were nine meetings of the Board, and each of the directors except Mr. Bramble attended at least 75% of the meetings of the Board and committees on which he or she served. Due to illness and a death in his family, Mr. Bramble attended 73% of the meetings of the Board and committees on which he served. In addition, all of the members of the Board, consistent with our policy, attended our 2007 Annual Meeting of Stockholders.

Lead Director

In April 2006, the Board amended our Corporate Governance Guidelines to provide for an independent Lead Director. At that time Mr. Sloan was elected by the independent directors to serve as Lead Director for a one-year term. In April 2007, Mr. Sloan was re-elected to serve for another one-year term. The Board periodically considers its structure and the role of the Lead Director.

The Lead Director’s duties include: chairing meetings of the non-management directors, acting as a liaison between the independent directors and the Chairman of the Board, approving meeting agendas, and providing an important communication link between the other independent directors and our stockholders. The Lead Director also has the authority to call additional meetings of the independent directors as appropriate.

As Lead Director, Mr. Sloan regularly communicates with our Chief Executive Officer on a variety of issues including business strategy and succession planning.

Executive Sessions of the Board

Our non-management directors meet in executive session at each regular Board meeting. Our Lead Director chairs these executive sessions. In addition, if at any time the group of non-management directors includes directors who are not independent under the NYSE listing standards and our Director Independence Categorical Standards, the independent directors will meet alone in executive session at least once a year.

Board Committee Membership and Meetings

During 2007, the Board had five standing committees: Asset Quality, Audit, Compensation and Benefits, Corporate Governance and Executive. The Compensation and Benefits Committee was formerly named the Compensation Committee. Its name has been changed to better reflect the full scope of its responsibilities. All of the members of the committees are nominated by the Corporate Governance Committee and appointed by the Board.

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The table below provides membership information for each of the Board’s committees.

2007/2008 Bank of America Committee Composition

In addition, the Board has made, subject to election of the director nominees by the stockholders at the Annual Meeting, the following committee assignments to be effective as of the Annual Meeting:

2008/2009 Bank of America Committee Composition

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While each committee has its own charter and designated responsibilities, the committees act on behalf of the entire Board and regularly report on their activities to the entire Board. The committee charters are posted on our website and key information about each committee is described below.

Asset Quality Committee. The Asset Quality Committee currently consists of five directors. During 2007, the Committee held six meetings. Duties of the Asset Quality Committee include:

Audit Committee. The Audit Committee currently consists of five directors, all of whom are independent under the NYSE listing standards, the Director Independence Categorical Standards and Securities and Exchange Commission (“SEC”) rules and regulations applicable to audit committees. The Board has determined that Mr. Barnet and Mr. May qualify as Audit Committee Financial Experts. During 2007, the Audit Committee held twelve meetings. Duties of the Audit Committee include the following:

Compensation and Benefits Committee. The Compensation and Benefits Committee currently consists of four directors, including our Lead Director, all of whom are independent under the NYSE listing standards and our Director Independence Categorical Standards. During 2007 the Compensation and Benefits Committee held five meetings. Duties of the Committee include:

The Committee may create subcommittees with authority to act on the Committee’s behalf. The Committee has delegated to the Stock Plan Award Subcommittee (which consists of the chairman of the Committee) the Committee’s authority to make awards and determine the terms and conditions of stock options, stock appreciation rights and restricted stock awards (both shares and units) under the Bank of America Corporation 2003 Key Associate Stock Plan (the “Key Associate Stock Plan”) that was most recently approved by stockholders in April 2006. However, this delegation of authority does not extend to awards to our executive officers.

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The Committee may delegate to management certain of its duties and responsibilities, including with respect to the adoption, amendment, modification or termination of benefit plans and with respect to the awards of stock options under certain stock plans. Significant delegations made by the Committee include the following:

The Committee actively engages in its duties and follows procedures intended to ensure excellence in the governance of our pay-for-performance mandate:

The form and amount of compensation paid to our non-employee directors is reviewed from time to time by the Committee. Competitive data is reviewed for the same competitor groups that are used in making compensation decisions for our executive officers. Any changes to director compensation are recommended by the Committee to the Board for approval.

Our executive officers are not engaged directly with the Committee in setting the amount or form of executive officer or director compensation. However, as part of the annual performance review for our executive officers other than the Chief Executive Officer, the Committee considers the Chief Executive Officer’s perspective on each executive officer’s individual performance and compensation as well as the performance of our various business segments, taking into account a number of factors such as revenue and operating net income growth, performance relative to competitors and quality of earnings.

We operate a large company in a dynamic, competitive global environment, and the Committee has responsibility for our global compensation and benefit programs that support this business. To perform its duties, the Committee requires assistance from a compensation consultant who has broad skills and experience, including experience with global compensation and benefits programs, and who has sufficient resources to meet our needs. The Committee has the sole authority and responsibility under its charter to approve the engagement of any such compensation consultant.

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In addition to possessing the necessary skill, experience and resources to meet our needs, the consultant must have no relationship with us that would interfere with its ability to provide independent advice. The Committee reviews any relationships between management and the consultant, as well as the amount of work performed for us by the consultant in areas other than executive officer and director compensation. Given that there are a limited number of compensation consultants with the broad skills, experience and resources necessary to support a company of our size and global scope, the Committee believes that its compensation consultant may have other relationships with us, so long as those relationships do not interfere with its ability to provide independent advice to the Committee. If the compensation consultant provides services to us other than in connection with the evaluation of director, chief executive officer or senior executive compensation and benefits, the Committee will approve the annual amount of aggregate fees permitted for such other services.

The Committee engaged Towers Perrin to serve as its compensation consultant for 2007. In this capacity, Towers Perrin assisted the Committee by providing external market and performance comparisons, advising the Committee with respect to executive officer, Chief Executive Officer, and director compensation, providing analysis and advice concerning equity plan design issues, and assisting on other issues from time to time. Representatives from Towers Perrin attended all of the Committee meetings in 2007.

Towers Perrin also provides other services to us in the areas of global retirement and healthcare benefits, for which the Committee has oversight responsibility. In addition, Towers Perrin provides a small amount of services in other areas. The Committee took these services into account when it retained Towers Perrin to serve as its compensation consultant and concluded that these other relationships with us would not interfere with Towers Perrin’s ability to provide independent advice to the Committee. The Committee has approved an annual amount of aggregate fees for Towers Perrin for all services, and at least annually the Committee reviews the services performed by, and the actual fees paid to, the firm.

Corporate Governance Committee. The Corporate Governance Committee currently consists of four directors, including our Lead Director, all of whom are independent under the NYSE listing standards and the Director Independence Categorical Standards. During 2007, the Corporate Governance Committee held four meetings. Duties of the Corporate Governance Committee include:

Executive Committee. The Executive Committee currently consists of four directors, including our Lead Director. During 2007, the Executive Committee held five meetings although it has only one regularly scheduled meeting per year. The Executive Committee has the power to act on behalf of the Board between regular Board meetings. The Executive Committee reports its actions to the full Board at the next regular meeting.

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Identifying and Evaluating Nominees for Director

The Corporate Governance Committee is responsible for evaluating candidates and recommending proposed director nominees to the Board. The Corporate Governance Committee will consider candidates proposed or suggested by Board members, management, third party search firms retained by the Corporate Governance Committee and stockholders. The Corporate Governance Committee follows the same process and uses the same criteria for evaluating candidates whether proposed by Board members, management, third party search firms or stockholders.

Our Corporate Governance Guidelines set forth the standards for evaluating candidates as director nominees. The Corporate Governance Committee and the Board consider the overall experience and expertise represented by the Board as well as the qualification of each candidate. Specifically, the standards for evaluating candidates are as follows:

In addition, a director who has reached the age of 72 will not be nominated for election to the Board. A director who changes his or her principal occupation shall offer to resign, and the Corporate Governance Committee, along with the Chairman of the Board, will determine whether to accept such resignation. Management directors will resign from the Board when they leave their officer positions.

Any stockholder recommending a candidate to be considered by the Corporate Governance Committee for nomination at an annual meeting of stockholders must submit the proposal in writing by no later than October 15^th of the preceding year. The proposal must include the following:

In October 2006, our Corporate Governance Guidelines were amended to provide that the Board shall nominate for election or re-election as directors only candidates who agree to tender, following the annual meeting at which they are elected or re-elected as directors, irrevocable resignations that will be effective upon: (i) the failure to receive the required vote at the next annual meeting at which they are nominated for re-election; and (ii) Board acceptance of such resignation. In addition, the Board shall fill director vacancies and new directorships only with candidates who agree to tender, promptly following their appointment to the Board, the same form of irrevocable resignation tendered by other directors in accordance with our Corporate Governance Guidelines.

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Communications with the Board of Directors

The Board has established a process for stockholders and other interested parties to communicate with non-management members of the Board or a specific committee. Parties may send a letter to Bank of America Corporation, Attention: Corporate Secretary, 101 South Tryon Street, NC1-002-29-01, Charlotte, North Carolina 28255. For further information, refer to “Contact the Board” on our website.

Code of Ethics

The Board has adopted a Code of Ethics that applies to all of our directors, officers and associates, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. The Code of Ethics embodies our commitment to the highest standards of ethical and professional conduct. All directors, officers and associates are required to annually certify that they have read and complied with the Code of Ethics. The Code of Ethics consists of basic standards of business practice as well as professional and personal conduct. We intend to post any amendments to the Code of Ethics, or waivers thereof (to the extent applicable to the Chief Executive Officer, Chief Financial Officer or Chief Accounting Officer), on our website.

Charitable Giving and Political Contributions

The Board annually reviews a report on our charitable giving and political contribution programs. Information regarding our policy on political contributions and activities can be found in our “Corporate Political Contributions Policy Statement”, which is posted on our website.

Director Compensation

Mr. Lewis is our sole employee director and he does not receive any compensation for his services as a director. We provide the following elements of annual compensation for our non-employee directors:

The annual restricted stock award is provided under the Bank of America Corporation Directors’ Stock Plan (the “Directors’ Stock Plan”) and is subject to a one-year vesting requirement. The number of shares awarded equals the dollar value of the award divided by the closing price of our Common Stock on the grant date, rounded down to the next whole share, with cash payable for any fractional share.

Non-employee directors can elect to defer all or any portion of their compensation through the Bank of America Corporation Director Deferral Plan (the “Director Deferral Plan”). If a director elects to defer any portion of the annual restricted stock award, we credit a “stock account” with a number of whole and fractional “stock units” of equal value, with each stock unit having the same value as our Common Stock. These stock units are subject to the same one-year vesting requirement that applies under the Directors’ Stock Plan. Directors can choose to have their annual cash award, as well as any Lead Director or chairman annual retainer, deferred either into the stock account or a “cash account.” We credit the stock account with dividend equivalents in the form of additional stock units and credit the cash account with interest at a long-term bond rate. Following retirement from the Board, a non-employee director receives the balances of his or her stock account (to the extent vested) and cash account in a single lump sum cash payment or in 5 or 10 annual cash installments per the director’s prior election. Because stock units are not actual shares of our Common Stock, they do not have any voting rights.

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The following table presents the compensation we paid, accrued or expensed with respect to our non-employee directors for their services in 2007:

This column does not include any such cash awards that were deferred under the Director Deferral Plan into a director’s stock account. Those amounts are instead reflected in the “2007 Stock Awards” column.

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In consideration for his consulting services and other agreements, Mr. Gifford receives: (i) a $50,000 retainer for each of the first five years of the agreement; (ii) use of company-provided aircraft for up to 120 hours per year for each of the first five years of the agreement and up to 100 hours per year for any additional year the agreement remains in effect thereafter; and (iii) office space (for as long as he requests) and secretarial support (for the first five years of the agreement, renewable annually thereafter) that is both reasonable and appropriate in size and scope.

For 2007, the value of these benefits equaled the following: (i) $50,000 in consulting fees; (ii) $1,009,481 in aircraft usage (which is the amount paid to a third party vendor); and (iii) $231,533 in office and administrative support. In addition, we paid Mr. Gifford a tax gross-up in the amount of $344,708 related to his use of company-provided aircraft. We did this because in 2006 we began imputing income for personal use of company-provided aircraft using a third-party “charter” value, rather than the more common IRS-approved Standard Industry Fare Level (SIFL). By changing to the charter value, we made it more expensive for our executive officers to use company-provided aircraft for personal travel. However, this change also made the aircraft usage for Mr. Gifford more expensive, which was not the intent when the Retirement Agreement was originally entered into. The tax gross-up represents the difference in the taxes Mr. Gifford is required to pay using charter values versus what he would have had to pay had we continued using SIFL values.

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Upon his retirement as an associate, Mr. Gifford became entitled to receive compensation as a non-employee director as more fully described above.

Stock Ownership Requirements for Directors. We have formal stock ownership requirements that apply to our non-employee directors. Under these requirements, each non-employee director is required to own and hold a minimum of 10,000 shares of our Common Stock. All full value shares beneficially owned are included in the calculation. New non-employee directors have up to five years to achieve compliance. All non-employee directors who have served on the Board five years comply with our requirements. Non-employee directors cannot sell the restricted stock they receive as compensation (except as necessary to pay taxes upon vesting) until termination of their service.

ITEM 1: ELECTION OF DIRECTORS

The Board has nominated each of the following individuals for election at the Annual Meeting. Each director elected will serve until the next annual meeting of stockholders when his or her successor has been duly elected and qualified, or until the director’s earlier resignation or removal. If any nominee is unable to stand for election for any reason, the persons appointed to vote the proxies may vote at the Annual Meeting for another person proposed by the Board, or the number of directors constituting the Board may be reduced.

If a nominee who is currently serving as a director is not elected at the Annual Meeting, under Delaware law the director will continue to serve on the Board as a “holdover director.” However, under our Corporate Governance Guidelines, any director who fails to be elected must offer to resign from the Board. The director whose resignation is under consideration will abstain from participating in any decision regarding that resignation. The Corporate Governance Committee and the Board may consider any factors they deem relevant in deciding whether to accept a director’s resignation. The Board will publicly disclose its decision regarding the resignation within 90 days after results of the election are certified. If the resignation is not accepted, the director will continue to serve until the next annual meeting and until the director’s successor is elected and qualified. If a nominee who is not already serving as a director is not elected at the Annual Meeting, under Delaware law that nominee will not become a director and will not serve on the Board as a “holdover director.”

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The Nominees

Set forth below are each nominee’s name, principal occupation and five year business history.

The Board recommends a vote “FOR” all of the nominees listed below for election as directors (Item 1 on the proxy card).

		WILLIAM BARNET, III (65), Chairman, President and Chief Executive Officer, The Barnet Company, Spartanburg, South Carolina, a real estate and other investments firm. He has been in his present position since 2001 and has been President of Barnet Development Corporation, a real estate investment firm, since 1990. He has also served as Chairman of William Barnet & Son, LLC, a synthetic fiber processing company, from 2001 to 2006, and served as Chief Executive Officer from 2000 to 2001. He served as President and Chief Executive Officer of William Barnet & Son, Inc. from 1976 to 2000. He has been the Mayor of Spartanburg, South Carolina since 2002. He has been a director of the Corporation since April 2004 and is a member of the Audit Committee. He also serves as a director of Duke Energy Corporation.
		FRANK P. BRAMBLE, SR. (59), Former Executive Officer, MBNA Corporation, Wilmington, Delaware. He served as an advisor to the Executive Committee of MBNA Corporation, a financial services company, from April 2005 to December 2005 when it was acquired by the Corporation. Prior to that time, he had served as Vice Chairman of MBNA from July 2002 to April 2005. He also served as a director of Allfirst Financial, Inc. and Allfirst Bank from April 1994 to May 2002, and from December 1999 to May 2002 as Chairman of the Board. He has been a director of the Corporation since January 2006 and is a member of the Asset Quality Committee.
		JOHN T. COLLINS (61), Chief Executive Officer, The Collins Group, Inc., Boston, Massachusetts, a venture capital, private equity investments and management firm. He has been in his present position since 1995. He has been a director of the Corporation since April 2004 and is a member of the Audit Committee.
		GARY L. COUNTRYMAN (68), Chairman Emeritus and Director, Liberty Mutual Group, Boston, Massachusetts, an international and property and casualty insurance company. He served as Chairman of Liberty Mutual Group from 1986 to 2000. He also served as Chief Executive Officer from 1986 to 1998. He has been a director of the Corporation since April 2004 and is a member of the Executive Committee. He also serves as a trustee of NSTAR and a director of CBS Corporation.
		TOMMY R. FRANKS (62), Retired General, United States Army, Roosevelt, Oklahoma. General Franks has operated Franks & Associates, LLC, a private consulting firm, since 2003. He served in the United States Army from 1965 to 2003. In August 2003, he retired as a four star general. He has been a director of the Corporation since January 2006 and is a member of the Audit Committee.

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		CHARLES K. GIFFORD (65), Former Chairman, Bank of America Corporation, Charlotte, North Carolina. He served as Chairman of the Corporation from April 2004 until January 2005. Prior to that time, he had served as Chairman and Chief Executive Officer of FleetBoston since 2002. He also served as President and Chief Executive Officer of FleetBoston from 2001 to 2002 and President and Chief Operating Officer from 1999 to 2001. He has been a director of the Corporation since April 2004 and is a member of the Executive Committee. He also serves as a trustee of NSTAR and a director of CBS Corporation.
		KENNETH D. LEWIS (60), Chairman, Chief Executive Officer and President, Bank of America Corporation, Charlotte, North Carolina. He has served as Chief Executive Officer since April 2001, President since July 2004 and Chairman since February 2005. He previously served as Chairman from April 2001 to April 2004 and President from January 1999 to April 2004. He also served as Chief Operating Officer from October 1999 to April 2001. He also serves as Chairman, Chief Executive Officer, President and a director of Bank of America, N.A. He has been a director of the Corporation since 1999 and is a member of the Executive Committee.
		MONICA C. LOZANO (51), Publisher and Chief Executive Officer, La Opinion, Los Angeles, California, the largest Spanish-language newspaper in the United States. She has been in her present position since January 2004. In addition, she has served as Senior Vice President of ImpreMedia, LLC, the parent of La Opinion, since January 2004. From 2000 to 2004, Ms. Lozano served as President and Chief Operating Officer of Lozano Enterprises. She also served as a member of the Board of Regents of the University of California since December 2001, and as trustee of the University of Southern California since 1991. She has been a director of the Corporation since April 2006 and is a member of the Asset Quality Committee. She also serves as a director of California HealthCare Foundation and The Walt Disney Company.
		WALTER E. MASSEY (69), President Emeritus, Morehouse College, Atlanta, Georgia. He served as President of Morehouse College from August 1995 to June 2007. He has been a director of the Corporation since 1998 and is a member of the Audit Committee. He also serves as a director of BP p.l.c., Delta Air Lines, Incorporated and McDonald’s Corporation.
		THOMAS J. MAY (60), Chairman, President, Chief Executive Officer and Trustee, NSTAR, Boston, Massachusetts, an energy utility company. He has served as President of NSTAR and its subsidiaries since 2002 and as Chairman, Chief Executive Officer and Trustee since 1999. He has been a director of the Corporation since April 2004 and is chairman of the Audit Committee.
		PATRICIA E. MITCHELL (65), President and Chief Executive Officer, The Paley Center for Media, New York, New York. She has served in her present position since March 2006. Prior to that time, she had served as President and Chief Executive Officer of Public Broadcasting Service from March 2000 to March 2006. She also has served as President of CNN Productions and Time Inc. Television, a division of Time Warner, Inc. She has been a director of the Corporation since 2001 and is a member of the Compensation and Benefits and Corporate Governance Committees. She also serves as a director of SunMicro Systems, Incorporated.

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		THOMAS M. RYAN (55), Chairman, President and Chief Executive Officer, CVS/Caremark Corporation, Woonsocket, Rhode Island, an integrated provider of pharmacy and related healthcare services. He has served as President and Chief Executive Officer since May 1998 and as Chairman since April 1999. He has been a director of the Corporation since April 2004 and is chairman of the Corporate Governance Committee and a member of the Compensation and Benefits Committee. He also serves as a director of Yum! Brands, Inc.
		O. TEMPLE SLOAN, JR. (69), Chairman and Chief Executive Officer, General Parts International, Inc., Raleigh, North Carolina, a distributor of automotive replacement parts. He has been a director of the Corporation since 1996. He is the Corporation’s Lead Director and is chairman of the Compensation and Benefits and Executive Committees and a member of the Corporate Governance Committee. He also serves as Chairman of the Board of Highwoods Properties, Inc. and as a director of Lowe’s Companies, Inc.
		MEREDITH R. SPANGLER (70), Trustee and Board Member, Charlotte, North Carolina. She is a director of C. D. Spangler Construction Company and Chairman of the Board of the C. D. Spangler Foundation. She served on the Wellesley College Board of Trustees from 1989 to June 2007. She has been a director of the Corporation since 1988 and is a member of the Compensation and Benefits and Corporate Governance Committees.
		ROBERT L. TILLMAN (64), Former Chairman and CEO Emeritus, Lowe’s Companies, Inc., Mooresville, North Carolina, a home improvement retailer. He served as Chairman and Chief Executive Officer of Lowe’s Companies, Inc. from January 1998 until January 2005. He has been a director of the Corporation since April 2005 and is a member of the Asset Quality Committee.
		JACKIE M. WARD (69), Retired Chairman/CEO, Computer Generation, Inc., Atlanta, Georgia, a telecommunications software company. She served as Chairman of Computer Generation Inc., from May 2000 to December 2000 and as Chairman, President and Chief Executive Officer from October 1968 to May 2000. She has been a director of the Corporation since 1994 and is chairman of the Asset Quality Committee. She also serves as a director of Equifax, Inc., Flowers Foods, Inc., Sanmina-SCI Corporation, SYSCO Corporation and Wellpoint, Inc.

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STOCK OWNERSHIP

As of December 31, 2007, we had two classes of voting securities: the Common Stock and the Series B Stock. As of that date, we did not know of any person who beneficially owned 5% or more of the Common Stock. The following table sets forth, as of December 31, 2007, information regarding the sole holder known to us to beneficially own more than 5% of the Series B Stock.

As of December 31, 2007, no director, nominee or executive officer of the Corporation owned any shares of the Series B Stock.

The following table sets forth information as of December 31, 2007 with respect to the beneficial ownership of Common Stock by: (i) each director and nominee for director; (ii) each executive officer named in the Summary Compensation Table; and (iii) all directors, nominees and executive officers as a group.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and some of our officers to file reports with the SEC indicating their holdings of, and transactions in, our equity securities. Based solely on a review of the copies of such reports we received, and written representations from the reporting persons, we believe that, during 2007, our reporting persons complied with all Section 16(a) filing requirements, except that, due to an administrative error on the part of the Corporation, a late Form 4 was filed on behalf of Mr. Gifford to report an option exercise and sale of 333,180 shares.

COMPENSATION AND BENEFITS COMMITTEE REPORT

The Compensation and Benefits Committee has reviewed and discussed with management the Compensation Discussion and Analysis that immediately follows this report. Based on this review and discussion, the Compensation and Benefits Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2007.

Submitted by the Compensation and Benefits Committee of the Board:

O. Temple Sloan, Jr., Chairman

Patricia E. Mitchell

Thomas M. Ryan

Meredith R. Spangler

COMPENSATION DISCUSSION AND ANALYSIS

Overview

We operate a large, global financial services business in a very competitive environment. To best meet the challenges of running a business of our size and scope, we have designed our executive compensation program, under the direction of the Compensation and Benefits Committee of the Board, to attract and retain the highest quality executive officers and directly link pay to our performance. This pay-for-performance mandate results in a compensation program that:

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The key elements of compensation for our executive officers are annual cash incentive awards, restricted stock awards (which can be granted as shares or units) and stock option awards. These awards make up most of the total annual compensation opportunity and are based on an annual performance review. Base salary, retirement benefit accruals and perquisites or other fringe benefits make up only a minor portion of the total annual compensation opportunity.

The annual performance review for determining cash incentive, restricted stock and stock option awards follows a principled, structured framework for analysis. This analysis focuses on financial performance measures that the Compensation and Benefits Committee believes collectively best indicate successful management of our business. The analysis takes into account both performance against internal business goals and relative performance against our competitors over one-year and multi-year periods.

We provide most of the total annual compensation opportunity in stock, because stock ownership is the simplest, most direct way to align our executive officers’ interests with those of our stockholders. The vesting and other design features of these awards, together with our stock ownership requirements, encourage long-term stock ownership by our executive officers to further motivate them to create long-term stockholder value.

Ongoing dislocations in the capital markets and a slowing economy severely impacted the performance of nearly all major financial institutions in the United States in 2007, and we were no exception. At the same time, we accept accountability for business decisions we made that contributed to our disappointing financial results in 2007. Consistent with the pay-for-performance mandate referenced above, the Compensation and Benefits Committee determined that our financial performance in 2007 should yield incentive awards for our executive officers that were significantly below target.

Also, because our executive officers have significant stock ownership in the form of vested and unvested restricted stock and stock option awards as intended by the design of our program, our executive officers shared with our stockholders the disappointing performance of our stock price during 2007. At the same time, the design of our executive compensation program highly motivates our executive officers to manage our company for the future with the goal of creating long-term stockholder value.

Many of our program’s features demonstrate the commitment to our pay-for-performance mandate:

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Target Compensation

Each year the Compensation and Benefits Committee determines a target total compensation package for each executive officer, made up of base salary plus the following three elements of performance-based compensation:

In establishing the amount of the target total compensation package for each year, the Compensation and Benefits Committee exercises its judgment after considering the following factors:

The Compensation and Benefits Committee establishes the base salary levels for our executive officers to reflect each executive officer’s scope of responsibility and accountability within the company and to be part of a competitive total compensation package in light of compensation practices at our primary competitor group.

The balance of the target total compensation package, made up of annual cash incentive, restricted stock and stock option awards, comprises nearly all of the total annual target compensation opportunity for our executive officers. The actual awards are determined annually after a review of our performance for the year. See “Measuring Performance” below for more details. As a result, our executive compensation program links almost all of our executive officers’ actual compensation each year to our performance as determined by the Compensation and Benefits Committee.

Emphasis on Long-Term Stock Ownership

The Compensation and Benefits Committee believes that stock ownership by our executive officers is the clearest, most direct way to align their interests with those of our stockholders. As a result, each executive officer’s target total compensation package includes a balanced combination of restricted stock and stock option awards. These awards make up a majority of the target total compensation package.

The Compensation and Benefits Committee places somewhat greater emphasis on restricted stock awards over stock options as a means to increase long-term stock ownership by our executive officers. Our restricted stock and stock option awards encourage long-term stock ownership through the following features:

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For many years it has been a common practice for companies that make restricted stock awards, including our company, to include payments for cash dividends, or dividend equivalents, on the restricted stock before it becomes vested. To further enhance the long-term nature of our awards, dividend equivalents for restricted stock awards granted to our executive officers for performance in 2007 and later years will be accrued with interest from the grant date and paid only if and when the underlying award becomes vested.

In addition, our Corporate Governance Guidelines include stock ownership requirements for our executive officers. Under these requirements, our Chief Executive Officer must hold at least 500,000 shares of our Common Stock and our other executive officers at least 150,000 shares. We disregard stock options (whether vested or unvested) for this purpose. New executive officers have up to five years to meet these requirements. As of December 31, 2007, all of our executive officers who have been executive officers for at least five years met these requirements.

Measuring Performance

The Compensation and Benefits Committee determines the actual cash incentive, restricted stock and stock option awards after the end of the performance year based on the Committee’s assessment of the performance of our company and the executive. In this section, we describe the principled, structured framework for analysis that the Committee uses for this performance evaluation.

The approach taken by the Compensation and Benefits Committee ultimately relies on the Committee’s judgment after a comprehensive review of our performance against a set of financial metrics, discussed below, as well as consideration of qualitative and other factors, without any formulas or pre-established weightings. The Committee believes that relying on formulas and weightings could lead to a false sense of precision with outcomes that may not align with the best interests of stockholders.

The Compensation and Benefits Committee evaluates our performance against four measures of stockholder satisfaction which the Committee believes collectively best indicate successful management of our business:

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The Compensation and Benefits Committee applies the following core principles in its annual performance analysis:

In order for our executive officers to achieve target or above target compensation awards, the Compensation and Benefits Committee must determine that:

The Compensation and Benefits Committee also considers objective data on the successful implementation of strategic initiatives, such as timely achievement of integration goals, expense savings, etc., that position us for future growth while also delivering positive total stockholder returns.

For those executive officers who lead one of our three primary business segments—Global Consumer and Small Business Banking, Global Corporate and Investment Banking and Global Wealth and Investment Management—the Compensation and Benefits Committee reviews data about how that business segment performed against its internal business goals. In addition, as part of the annual performance and compensation review for our executive officers other than the Chief Executive Officer, the Committee considers the Chief Executive Officer’s perspective on each executive officer’s individual performance and compensation, as well his views on the performance of our various business segments, taking into account a number of factors such as revenue and operating net income growth, performance relative to competitors and quality of earnings.

Competitor Groups

The Compensation and Benefits Committee uses the five other largest United States bank holding companies as the primary competitor group to review compensation levels and test relative performance. We use these banks as our primary competitor group because we are in direct competition with them for customers, associates and investors. Also, these banks follow similar economic cycles to our own, making relative performance measurements more meaningful. These banks are:

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The Compensation and Benefits Committee also reviews executive compensation and performance information for a leading group of global companies headquartered in the United States spanning all industries, including the financial industry. These companies each have net income and market capitalization approximating or exceeding $7.0 billion and $100 billion, respectively. We review information about these companies to get a general perspective on compensation practices and performance for companies of similar size and global scope. For 2007, based on net income and market capitalization measured at December 31, 2006, these companies were:

How the Executive Compensation Program was applied in 2007

During 2007, the Compensation and Benefits Committee followed the process described above—reviewing compensation practices at our competitors, taking into account the relative size and scope of our business and the jobs our executive officers perform, considering the level of performance our program requires to receive awards at target level, and considering the advice of the Committee’s independent compensation consultant—and then established a target total compensation package for each of our executive officers, as shown below.

Target

The Chief Executive Officer’s target compensation is above that of the other executive officers because he has significantly greater responsibilities for the management and strategic direction of all of our lines of business and our company as a whole, as well as substantial obligations as the voice of our company. Effective October 24, 2007, the Compensation and Benefits Committee adjusted the annual base salary for Mr. Moynihan to $800,000 commensurate with his new job responsibilities as President, Global Corporate and Investment Banking.

In early 2008, the Compensation and Benefits Committee reviewed our performance following the principled, structured framework for analysis discussed above. In doing so, the Committee observed that ongoing dislocations in the capital markets and a slowing economy severely impacted the performance of nearly all major financial institutions in the United States in 2007, including Bank of America.

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Step 1: Review Performance Against Internal Business Goals. The Committee reviewed performance against internal business goals for 2007, taking into account the quality and sustainability of our earnings, and determined that we had significantly missed our goals. Our actual results versus our 2007 internal business goals were as follows:

Step 2: Review Performance Relative to Competitors Over One-Year and Multi-Year Periods. The Committee reviewed our performance relative to the primary competitor group over prior one-year and multi-year periods. The Committee concluded that, relative to our competitors, we had performed generally below median over the prior one-year period and generally at about the median on a multi-year basis. In particular, the Committee noted:

Step 3: Other Considerations. The Committee reviewed the continued strategic initiatives that are in place to position us for future growth while delivering positive total stockholder returns. In particular, the Committee noted:

In addition, the Committee took into account the performance of our primary business segments during 2007 and Mr. Lewis’s perspective on the individual performance of the other executive officers in deciding their awards. In particular, while none of our core businesses fully met all of their operating business goals for 2007, Global Corporate and Investment Banking missed its goals the most.

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Applying the principled, structured framework for analysis described above, the Compensation and Benefits Committee determined to award the executive officers total compensation packages for 2007 that were significantly below target. The Committee reflected on each element of each officer’s compensation package and in its judgment awarded the following for 2007:

Actual

The Committee decided that reducing the immediate and tangible portions of the total annual compensation package, cash incentive and restricted stock, would have the most direct impact on the executive officers. Therefore, the Committee made cash incentive and restricted stock awards significantly below target:

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The Summary Compensation Table on page 31 does not reflect all of these compensation decisions for 2007, because under SEC rules that table is required to include restricted stock and stock option awards expensed during 2007. The amounts expensed during 2007 related primarily to awards granted in February 2007 based on 2006 performance. Had the Summary Compensation Table been prepared by showing the expensed value of the awards described above that were awarded for 2007 performance, the results would have appeared as follows:

Compensation for 2006 and 2007 Performance

Other Elements of Compensation

The other elements of our executive compensation program are as follows:

Retirement Benefits. Executive officers participate in our various employee benefit plans designed to provide retirement income. Our qualified and nonqualified pension plans provide a retirement income base, and our qualified and nonqualified 401(k) plans permit additional retirement savings. To encourage retirement savings under the qualified and nonqualified 401(k) plans, we provide an employer matching contribution.

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We limit eligible compensation for earning benefits under the qualified and nonqualified pension plans and for employer matching contributions under the qualified and nonqualified 401(k) plans to the first $250,000 in annual cash compensation. As a result, the Compensation and Benefits Committee’s decisions to grant annual performance-based cash incentive, restricted stock and stock option awards do not create any additional retirement benefits earned under these plans.

Our executive officers do not earn additional retirement income under any supplemental executive retirement plans (SERPs). We believe that our executive officers should be able to provide for their retirement needs from the compensation they earn based on our performance. Consistent with our pay-for-performance mandate, we froze benefits effective December 31, 2002 under the Bank of America Corporation and Designated Subsidiaries Supplemental Executive Retirement Plan (the “Bank of America SERP”) in which Mr. Lewis, Ms. Brinkley, Ms. Desoer and Mr. Taylor participate. Accordingly, no additional benefits are earned under the Bank of America SERP for compensation or service for periods beginning after December 31, 2002. In addition, at the request of Mr. Moynihan, his participation in the FleetBoston Financial Corporation Supplemental Executive Retirement Plan (the “Fleet SERP”) was frozen effective December 31, 2005, and he therefore earns no further benefits under that plan for compensation or periods of service after that date.

For more information about these plans, see “Pension Benefits” and “Nonqualified Deferred Compensation” on pages 40 and 42 respectively.

Perquisites and Other Fringe Benefits. Our executive officers receive health and welfare benefits, such as group medical, group life and long-term disability coverage, under plans generally available to all other United States-based salaried associates. Consistent with our pay-for-performance mandate, we provide very few executive fringe benefits. Because we have internal expertise on tax and financial planning matters, we make those services available at no cost to our executive officers for their personal tax and financial planning needs. We also provide our executive officers with secured parking and home security systems. Our executive officers have access to our corporate aircraft on a limited basis for personal travel pursuant to company guidelines.

Recoupment Policy

If our Board or an appropriate Board committee has determined that any fraud or intentional misconduct by one or more executive officers caused us, directly or indirectly, to restate our financial statements, the Board or committee will take, in its sole discretion, such action as it deems necessary to remedy the misconduct and prevent its recurrence. The Board or committee may require reimbursement of any bonus or incentive compensation awarded to such officers or cancel unvested restricted stock or outstanding stock option awards previously granted to such officers in the amount by which such compensation exceeded any lower payment that would have been made based on the restated financial results.

Timing of Equity Grants

We make annual awards of restricted stock and stock options to executive officers and other eligible key associates on a regular award date each year shortly after the end of the applicable performance year. This is the same date that we pay cash incentive awards for the performance year, and is scheduled to give us sufficient time to complete all performance reviews and obtain all necessary approvals. For the past few years, the annual award date has been February 15, or the immediately preceding business day if February 15 is not a business day.

We occasionally make awards of restricted stock or stock options other than on the regular annual award date, usually in connection with hiring a new key associate or awards under annual performance plans that follow a different timing cycle. We make these awards on the first day of the calendar month following approval, which for newly hired associates is on or after their actual hire date.

Formal approval for awards is obtained prior to the grant dates. We do not coordinate the timing of our awards with the release of material non-public information. The exercise price for the stock options equals the closing price of our Common Stock for the grant date.

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Section 162(m)

Section 162(m) of the Internal Revenue Code limits the deductibility of compensation paid to certain executive officers in excess of $1.0 million, but excludes “performance-based compensation” from this limit.

Cash incentive compensation and restricted stock awards are provided under the stockholder-approved Executive Incentive Compensation Plan (EIC Plan). Under the EIC Plan’s compensation formula, participating executive officers may receive maximum deductible incentive compensation for a year up to 0.20% of our net income for that year. Under the EIC Plan, the Compensation and Benefits Committee can determine to make all or any portion of the annual incentive award in the form of a restricted stock award under our Key Associate Stock Plan.

In addition, compensation realized by our executive officers through the exercise of stock options should be fully deductible to us as “performance-based compensation” under Section 162(m).

Some compensation payable to our executive officers may exceed the Section 162(m) deduction limit. All compensation decisions for our executive officers are made with full consideration of the Internal Revenue Code Section 162(m) implications.

Conclusion

We believe our executive compensation program results in total compensation awards that are reasonable and appropriate in amount, align our executive officers’ interests with those of our stockholders, are directly linked to our performance and are easy for our stockholders to understand.

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EXECUTIVE COMPENSATION

Summary Compensation Table. The following table shows compensation paid, accrued or expensed with respect to our executive officers during the year indicated:

Summary Compensation Table